Entrepreneurship and economic development
19 November 2019
Happy Women’s Entrepreneurship Day!
Reflecting on this day made us think of the entrepreneur’s role in our communities and most importantly in the overall growth of the African economy.
In 2017 the Global Entrepreneurship Monitor (GEM) report noted that Africa, out of all the world’s regions had the most positive attitudes towards entrepreneurship. In their study, three quarters of African working-age adults considered entrepreneurship a good career choice, while 77% said that entrepreneurs are admired in their societies.
Economic development is the process where the economic well-being and quality of life of a nation, region or local community are improved over a period of time. Entrepreneurs play a vital role in economic development, serving as the catalysts in the process of industrialisation and economic growth. Technical progress alone cannot lead to economic development, unless technological breakthroughs are put to economic use by entrepreneurs.
Africa desperately needs entrepreneurs to help address the serious socio-economic challenges we face. The following are key contributions made by entrepreneurs towards economic development:
- The businesses they establish create jobs for local populations, who derive economic benefits from being employed. These economic opportunities uplift and support communities through improvements to the quality of life and overall standard of living.
- Technology has made it possible for small, entrepreneur-led businesses to expand into regional and global markets. When new businesses export goods and services to nearby regions, these enterprises contribute directly to a region’s productivity and earnings. This increase in revenue strengthens an economy and promotes the overall welfare of a population.
- New technologies developed by entrepreneurs promote efficiency – economic growth, generally speaking, is driven by new technologies and their creative applications. Periods of rapid innovation have historically been accompanied by periods of strong economic growth.
- Innovative business practices create efficiency and conserve resources. Innovation in agriculture is especially relevant for addressing socioeconomic challenges in Africa, in addition to encouraging economic growth.
GEM reports that countries with high rates of entrepreneurial success also have effective support structures from private and public sectors as well as established mentorship programmes for both aspirant and current entrepreneurs. This is where the greatest need is in Africa, especially amongst women entrepreneurs who are often excluded from economic activity.